Libraries Starting to Adopt Pay Per Use for Digital Content

Library Collection Managers often have to buy the titles they want to make available to their patrons. eBooks, audiobooks, music and streaming movies all have to be purchased in advance in order to have them included in the catalog to be loaned out. Sometimes the digital offerings take up a tremendous amount of capital and if a librarian is out of touch with the needs of the community, money can sometimes be wasted. An emerging trend is starting to catch on that may solve this conundrum, pay per use.

The pay per use model is starting to be embraced by a number of companies such as Overdrive and Hoopla. The concept allows the library to include the entire catalog of content and only pay when a customer borrows it. Instead of selectively deciding what audiobook or movie to buy, they can just display everything. Backend tools allow the collections manager to set monetary thresholds to insure they don’t go over budget.

Hoopla is an established audiobook company that has been in business for close to 20 years, but has only been doing digital for the last two. The company has one of the largest selections of audiobooks and do not charge libraries any sort of fees to use their system. Whenever a customer borrows an audio editions from the app or the website they can immediately listen to them without having to download any 3rd party apps. Librarians dig the ability to make their own collections, incase they want to manually curate the way everything is displayed.

Overdrive is experimenting with pay per use as part of their new arrangement with Warner Brothers. The company is making many backlist titles available within their Media Console App. Libraries will not have to buy the movies in advance and instead only pay when a patron borrows a title. Backend tools allow librarians to establish a daily, weekly or monthly revenue threshold, similar to Hoopla.

One of the main benefits of the pay per use model is that publishers are likely to embrace this as an avenue to further monetize their eBook sales. Penguin Random House, Hachette, Simon and Schuster and HarperCollins all have different mindsets when it comes to selling content to libraries. Some only have a 26 checkout limit before librarians are forced to buy the title again, some expire after one year and others mandate libraries have to sell eBooks directly. The Pay per Use model would insure frontlist and backlist titles would always be purchased, which would help drive down prices to less than wholesale.

Pay per use is not yet a fixture at libraries yet, but established players are starting to adopt. This system is still in its infancy and there is little financial information available on the costs libraries are paying or if the business model has long-term viability. Still, showing the entire catalog of content is fairly compelling. Hopefully companies like McGraw Hill and Follet start adopting pay per use to assist in more widespread adoption.

Michael Kozlowski is the Editor in Chief of Good e-Reader. He has been writing about electronic readers and technology for the last four years. His articles have been picked up by major and local news sources and websites such as the Huffington Post, CNET and more. Michael frequently travels to international events such as IFA, Computex, CES, Book Expo and a myriad of others. If you have any questions about any of his articles, please send Michael Kozlowski an email to michael@goodereader.com